Open Banking explained
How it works, sharing data safely and paying by bank
Open Banking lets you share your bank balances and transaction history with other financial institutions and third-party apps to help you manage your money. You can also use it to pay directly from your bank account. You choose whether to use it and both sharing info and making payments require your permission. This guide explains how it works, whether it’s safe and what protection you get if something goes wrong.
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What is Open Banking?
Since 2018, Open Banking rules have meant the UK's largest banks have to let you share your financial data with authorised providers, granting them read-only access to things like your spending transactions and regular payments.
With Open Banking, there’s no need to fill out lengthy forms to give the third party app or website the data it needs, it can access it all directly – provided you've given your permission via your bank's mobile or online banking.
What is Open Banking used for?
There are two main ways to use it:
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Sharing account information. An app can read information from accounts you choose, such as your balance, transactions and regular payments. This can help it analyse your spending or let you see your accounts from different banks in one place.
Budgeting apps can use Open Banking to categorise your spending, track bills and show how much you have left. Some services also use account information to assess affordability when you apply for borrowing or rent a property.Automatic savings apps can analyse your balance and spending to estimate what you can afford to save. Moving that money requires a separate arrangement, such as a Direct Debit or an authorised Open Banking payment.
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Making payments. ‘Pay by bank’ lets you make payments online directly from your bank account without entering your debit or credit card details. You’ll usually be sent to your bank’s app or website to approve the payment. Check the amount and recipient before confirming.
You won’t get Section 75 credit-card protection or chargeback rights. These can help you recover money when something goes wrong with a purchase, such as goods not arriving or a retailer going bust. For purchases where protection matters, consider paying by card instead.
How do I connect an account?
Banks share your information securely via technology called application programming interfaces (APIs). APIs simply allow two providers to 'talk' to each other and pass the information you've given permission to share. This kind of technology is already widely used by the likes of Facebook, Google Maps and Uber.
A provider will ask for your consent to access your info when you sign up to it through its app or website. You approve access with your bank — you don’t give the third-party app your banking password or PIN. The bank shares the permitted information through a secure digital connection.
Is Open Banking safe?
Yes, provided you only share data with an authorised provider. As long as they're authorised, providers will only be able to access data needed for the service you've signed up to – so if you've asked one to look at your current account with one bank, it wouldn't also be able to look at a credit card you hold with that bank unless you give your express permission.
Plus, all providers have to comply with data protection rules, including GDPR. The provider should tell you exactly which data it will use, how long for and what it'll do with it before you sign up. If you're unsure about anything, make sure you ask before you give it access, and if something feels wrong, don't share your data.
Check a provider is authorised before granting permission
Before connecting your account:
1. Find the provider’s full legal name. The firm’s legal name may differ from the app’s brand. Check its terms or privacy policy. If the app uses another company to provide the Open Banking connection, check which company is responsible and verify its details. Don’t rely solely on a registration number displayed on a website.
2. Check the firm is on the FCA Register. It must be authorised or registered for the relevant service — simply appearing on the register isn’t enough.
3. Search for it in the Open Banking Directory if it will access your bank-account data or make payments for you.
4. If anything does not match, or the firm lacks the relevant permissions, don’t grant access.
Check what you’re sharing
Depending on the service and permissions, shared information can include your account details, balance, incoming and outgoing transactions, Direct Debits and standing orders. This can reveal a lot about your income and spending habits.
Read the provider’s explanation of what it collects, who it shares information with and how long it keeps it. Providers must comply with data protection law and should only access the information needed for the service you’ve agreed to. If the access requested seems excessive or unclear, ask before proceeding.
What if something goes wrong?
If you find you’ve been a victim of fraud through a third party provider accessing your financial data via Open Banking, banks can help, as long as the provider is authorised. If you see a payment out of your account which you didn't authorise, go to your bank as it's responsible for refunding it – as long as you haven't been 'grossly negligent' – and your bank can then take it up with the third party if it thinks it's been at fault.
For problems with an app or service, complain to the provider first. If your complaint concerns your bank — for example, it refuses a refund — complain to the bank. You may be able to take an unresolved complaint to the free Financial Ombudsman Service. See our Financial rights guide.
If you’re concerned about how your personal information has been handled, complain to the company first. You can then raise your concerns with the Information Commissioner’s Office.
Open Banking FAQs
Do I have to use Open Banking?
No. Although Open Banking is available via most major UK banks, it’s a matter of opting in rather than opting out. You choose whether to connect an account or approve a payment and you can stop sharing your account information at any time.
How do I stop sharing my data?
You can withdraw permission through the app or service, or ask your bank to stop its access. Check your banking app or online banking for a section showing connected services.
For ongoing account-information access, you’ll generally need to reconfirm your consent with the service at least every 90 days. This doesn’t necessarily mean logging back into your bank each time. You can withdraw permission sooner.
Stopping access doesn’t automatically delete information already collected. You can ask the provider to delete it, though it may have a lawful reason to retain some records. Cancelling the connection may also be separate from cancelling a paid subscription.
Which banks offer Open Banking?
The nine largest banks and building societies in the UK are legally required to offer Open Banking:
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AIB Group UK (trading as First Trust Bank in Northern Ireland)
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Allied Irish Bank
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Bank of Ireland UK
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Barclays Bank
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HSBC Group (including First Direct and M&S Bank)
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Lloyds Banking Group (including Lloyds Bank, Bank of Scotland, and Halifax)
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Nationwide Building Society
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NatWest Group (including NatWest, Royal Bank of Scotland, and Ulster Bank NI)
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Northern Bank Limited (trading as Danske Bank)
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Santander UK
Since the initial rollout, many other high-street, digital-only, and challenger banks have voluntarily added Open Banking support, including:
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Monzo
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Starling Bank
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Revolut
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Metro Bank
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TSB Bank
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Clydesdale Bank / Virgin Money
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Co-operative Bank / smile
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Triodos Bank
You can check whether a specific provider or app is officially authorised via the Open Banking Directory.
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